Havant Borough Council has been told the amount of money it is expected to receive from the government next year is £2.355m – a drop of 76 per cent from the £7.543m it was awarded in 2010.

And the local authority’s long-term view is that funding will ‘disappear’ entirely by 2019 and more services will have to be outsourced to other organisations to cover costs.

Contracts for services will also have to be renegotiated to ensure taxpayers are getting value for money.

But Havant Tory MP David Willetts believes public services have been and will continue to be protected because the borough has been smart in its spending.

And he said no decision had been made in government to pull funds entirely.

Mr Willetts, who is standing down at the next general election, said: ‘I’m sure my successor will be making the case in parliament for Havant.

‘But what we are talking about is a national policy – as we bring down the deficit one of the things we have to do is reduce grants to local government.

‘We are very fortunate in Havant, in that we have a very well run council which has made efficiency savings.

‘So the core services it is responsible for have been able to carry on being delivered, even though the grant has come down.

‘Havant has more and more shared services with East Hampshire District Council now – there is no longer two separate groups of council officers.

‘They share a lot of responsibilities and it is very cost-effective.’

The government’s contribution excludes what the authority will collect from business rates and council tax should there be a freeze in current rates.

But Havant’s Lib Dem councillor Faith Ponsonby said further cuts mean tough times are ahead.

‘The outlook is bleak,’ she said. ‘It’s going to throw more and more emphasis on what the voluntary sector will do to help, but to be honest we are running out of volunteers.

‘If you throw in the cuts that have already been made at Hampshire County Council, our youth services and social services are being decimated.

‘I just don’t know how some of our vulnerable young people and elderly can manage.

‘We have already cut so much and it really is looking bleak following the government’s announcement of more swingeing cuts.’

Cllr Ponsonby said one of the options that may have to be considered in order to protect services is to raise council tax.

Councils across the area have warned of the impact reductions in government funding will have from next year.

Figures released this week reveal Portsmouth and surrounding borough councils will in total see a £7.9m drop in their finances from £223.3m to £215.4m for the next financial year, which starts in April.

The city will see the amount of cash it gets from the government and other sources reduced by 3.3 per cent.

Proportionally, Gosport is being hit hardest out of the boroughs with a six per cent drop in its funding to £10.5m.